On March 1, statistician and economist Dr. Jim Willie announced that London banks are currently confiscating and selling off Saudi Arabian gold reserves which diplomatically puts an end to the 40 year Petro-Dollar relationship between the West and the oil rich Arab kingdom.
They defended the Petro-Dollar defacto standard for 40 years. Their USTreasury Bonds and Wall Street bank stocks might be safely tucked away, but their Gold Accounts are being systematically stolen in London. Their gold is needed too much to preserve the system that lacks gold in urgency. The Saudis are being thrown under the bus, their gold stolen, their image vilified.
The following came out of a conversation, a string of messages shared with some colleagues and a London source. “There will be no easy heads-up alert on the quick changes to the gold market.
The rehypothecation of official gold accounts has entered a new phase. The gold owned by defenders of the Petro-Dollar is being seized, confiscated, pilfered, and stolen for the unspoken purpose of continuing the fiat paper currency regime with the tainted debauched USDollar at the center. The Saudi gold in London will be totally gone in a few more months. To be sure, it is going mostly to China. The Saudis are being gutted. - Jim Willie, Golden Jackass
The Saudi/U.S. relationship, which has sustained the Petro-Dollar as the global reserve currency, has been slowly declining for years and reached a climax in September of last year when the U.S. backed away from engaging in the Syrian Civil War at the request of the Arab kingdom. This refusal to send arms, troops, and funding inflamed the Saudi's, and led them to begin trading small amounts of oil using the Yuan instead of the dollar.
In response, the Western central banks are now seizing gold the Saudi's have stored in London vaults and are selling it to China to pay off losses incurred when the London Whale scandal rocked the markets in 2012. This scandal involved market speculation and losses of over $100 billion which had been collateralized with Chinese gold reserves, and which also led J.P. Morgan Chase to sell their Wall Street headquarters for nearly a third of its actual value to a Chinese company.
Several analysts this year have gone public declaring that 2014 will be the year that the world rejects the Petro-Dollar, and begins trading in a new gold backed currency. And with the U.S. and Britain throwing the Saudi's under the bus by confiscating their property and gold reserves to pay off an even bigger threat, the West is unofficially ending the Petro-Dollar agreement, and preparing for a new global monetary system that they hope will come from the IMF, and not from China or the BRICs financial partnership.